COMMENT
A4 Perfect storm about to hit Alberta BY ROBERT MCGARVEY SPECIAL TO THE ADVOCATE
Albertans can be forgiven for feeling a little woozy this holiday season. Eighteen months of economic turmoil have taken their toll on the economy — and more bad news is around the corner. The perfect storm about to hit Alberta could make the past year feel like the good old days. Strike one is the continuing collapse in oil prices. The benchmark price of West Texas Intermediate crude has fallen from over $100 a barrel in July 2014 to $34 a barrel. Goldman Sachs, one of the world’s leading investment banks, has gone from a 2009 prediction of $200 oil to now forecasting $20 per barrel. When analysts as shrewd as Goldman Sachs can’t predict the price of the world’s most important commodity, who is going to put up the billions of dollars in long-term investments needed to build a stable and dependable energy system? The answer can be found in Calgary’s vacant office towers and the many jobless Albertans. Statistics Canada says Alberta lost 15,000 highly-paid jobs in the last month alone and is
down almost 70,000 jobs year over year. Strike two is the sea change that has resulted from the Paris climate change accord and rising environmental sensibilities. Alberta’s new NDP Premier Rachel Notley has introduced a carbon tax. And newly-elected Prime Minister Justin Trudeau has promised to meet with the provinces soon to hammer out significant carbon reduction targets and strategies. The future of energy in Canada, then, is greener and far less reliant on fossil fuels. What this means for Alberta is anybody’s guess, but the transition to a greener economy will not be pretty for an industry and a province that bet its future on oil and coal. The Federal Reserve Bank in the United States delivered the third strike last week. The 25 basis points rise in nominal rates is minor in itself, but it heralds the end of zero interest rate policy. That policy helped keep the global economy from sinking into depression after the 2008 financial crisis. The U.S. economy is now just strong enough for central bankers to start to reverse course on rates. The Canadian economy is not. Canada has its own central bank, of course, but eventually it will have no choice but to follow the Fed’s lead
THURSDAY, DEC. 24, 2015
and start raising rates. Capital will be more expensive and mortgage payments will ratchet up, putting additional pressure on already-stressed families. While many of the environmental changes are long overdue, there’s no doubt that the extraordinary volatility in all commodity prices and the commitment to an entirely new energy infrastructure mark the end of an era. The resulting perfect storm will broadside Alberta and could devastate its energy industry. In order to manage this transition, national governments will have to be much more active in directing the economy. Ultimately, market forces will be displaced from their position directing the global economy. Paradoxically, it might be just the tonic Canada and Alberta, in particular, need to save the energy industry from complete meltdown. But Alberta’s importance in the Canadian economy and its present, and future, weakness will necessitate major intervention. That intervention could take the form of a national energy policy. The new reality might create a national consensus for energy self-sufficiency. Favouring Canadian energy would help displace the millions of barrels
of imported oil consumed in Eastern Canada, while guaranteeing Alberta producers a reliable domestic market and global prices. Undoubtedly this national policy will also set targets for transitioning from oil to more renewable sources of energy. But it would need do so in a way that maximizes the well-being of Canadians and considers the economic reality in all regions of the country. More than 30 years ago, then-prime minister Pierre Trudeau’s government introduced the National Energy Program. It was designed to protect Canadian consumers from rapidly rising oil prices and limited supplies. Alberta, of course, was violently opposed. Ultimately, oil prices cooled and the Conservative government that replaced Trudeau’s Liberals killed the program. It would be an irony of galactic proportions if another prime minister named Trudeau implemented a national energy strategy that saved Alberta and its energy industry, while setting Canada on the road to a new era of national unity and prosperity. Troy Media columnist Robert McGarvey is an economic historian and co-founder of the Genuine Wealth Institute.
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Unsure of which side is right in climate change arguments I have been hearing about climate change and the impending doom our world faces for some time now. Somewhere along the way, that impending doom of CO2 emissions became accepted as fact and the world has embarked on the most expensive experiment in the history of man. I suspect most people are like me. We really don’t want to cause irreparable damage to the earth and are subconsciously half convinced that we are guilty of polluting it, so we don’t really question the “science” or “facts.” I decided to do a little research. I spent most of a day on the internet looking for proof to support the facts we are hearing. What I learned is that there are some very well educated scientists, climatologists and even the co-founder of Greenpeace who present some very compelling arguments that climate change has been happening on Earth for millions of years. They also present some very compelling arguments that suggest that man made CO2 emissions are not going to contribute to global warming, rather the opposite, global cooling. Funny enough, they use the same data that the other side does, with very different conclusions. So, the question is, who is right? Is the science really fact, or still a theory? I’m not going to pretend that a day on the internet
CENTRAL ALBERTA’S DAILY NEWSPAPER Published at 2950 Bremner Avenue, Red Deer, Alberta, T4R 1M9 by The Red Deer Advocate Ltd. Canadian Publications Agreement #336602 Member of the Audit Bureau of Circulation Mary Kemmis Publisher mkemmis@reddeeradvocate.com Josh Aldrich jaldrich@reddeeradvocate.com Managing editor
makes me an expert or proves anything. What it did do is raise some doubt in my mind about what I’ve been told by the government, environmental groups who are not scientists, the media and the “experts” from the entertainment industry. Hundreds of thousands of researchers and scientists rely on the “facts” of the dangers of C02 for their living. There are trillions of dollars at stake in the effort to curb C02 emissions and any time there is that kind of money involved, it might be reasonable to worry about the motivation of those who will benefit. Our provincial and federal governments are about to take billions of dollars from Canadians in the form of a Carbon Tax. I think most of us are OK with that on the assumption we’ve been given the right “facts”. So, I challenge the government to prove to us that this is really necessary. Maybe a public debate between the two sides? If the government can’t convince the taxpayers that there truly is a problem, maybe we should politely refuse to pay? Dale Russell Red Deer
Handling of both sides of Bill 6 debate have been terrible As a retired Grade 1 teacher, I read and watch the antics, protests and opposition to Bill 6. I have attempted to understand the issues from both sides.
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In my view, the government did a very poor job of explaining its agenda and intent and opponents used yelling and rhetoric as their arguments. This reminds me of settling arguments between six year olds. My job was to teach the children how to settle their disagreements with respect and listening. Neither of which have been done by either side of Bill 6. Now we have taken the disagreement to the playground and are using bullying and threats. The Wildrose are standing on the sidelines, after ramping up the opponents, pretending to deescalate the fight. They continue to use inflammatory language as a means of communication, taking the high ground is not an option. I would never have allowed my students, or for that matter any student, to threaten, bully or suggest harming another. The playground rules are meant to establish a civil society beginning with the early years of schooling. Settling disagreements is not about threats or taking your ball and going home, it is about respect and discussion. These are absent in the protests of Bill 6. As an Albertan, I am sickened by the threatening posts towards the Premier and her cabinet. These threats have no place in the Alberta I cherish and love. People on both sides of this argument need to stand up and oppose this type of language. It is not innocent or harmless instead it is hurtful and unkind, words I have used many times in my teaching career. Barry Johns Sylvan Lake
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